Wednesday, October 04, 2006

Azaroff with Attitude, or Regionomics Rules!“Better Living Today” Starts with a “Better” Budget

Speaking in Parliament last week, Finance Minister Mykola Azarov sliced and diced a diet budget proposal from Chef Viktor Yanukovych. Neither NSNU nor BYuT displayed much appetite. “That’s one hell of a budget for a weight watcher like me,” the Evita Peron of Ukrainian politics probably thought, as she sat through the PowerPoint presentation that had her on the verge of vomiting.

After reading the menu between the lines, Snoozers sounded the alarms on the strange and sudden death of a maternity benefit program. One of Yushchenko’s “populist” policies, the program has pledged some $1,700 in several installments to mothers of new-born babies. Because hundreds of thousands of families have relied on it to cover some of the expenses, a change in government policy could affect procreation decisions nationwide. What could be more anti-democratic in a low-income country slowly recovering form a decade of depopulation?

Since the barren 90s, when the birth of Oligarchs Inc instituted abusive patterns of stratification for the rest of the country, Ukraine has shed some 5 million of its population. Today’s demographic resurgence, while far from a baby boom, raises hope that population growth will finally break even.

With his budgeting behavior now compromised, Azaroff threw a graceful wish-you-well cover-up. He smiled on the distressed gene pool, proudly saying that the program will continue unscathed. He then explained that the funding criteria reflected in the proposal simply restricted the program’s eligibility to financially disadvantaged applicants.

Too many hearts in this country refuse to melt when social responsibility crawls into the Regionalists rhetoric. A little bureaucratization here and there — and you will have to carry a second baby full term before you collect these much-needed monies for your first one.

The good news: Extraclinical research indicates that fear of negative publicity sometimes works to destroy other potent fears. The experience of being caught red-handed can trigger an adrenaline response that partially inhibits the panic welfarephobic syndrome, a state of acute anxiety known to affect top-ranking officials. It occurs when the patient believes that current levels of government spending may eat into the profit margins of the interest group he or she represents.

The Old Deal, or the New Ordeal In dire need of maintaining high visibility of activity, Tymo approached the budget issue in the mood of cougar-like agility, intent on signing NSNU home cats to an opposition deal. She postulated that their shared indigestion of the budget proposal could become the basis for an allied BYuT-NSNU opposition. As an extension of this initiative, she called for a shadow government to be formed.

Championing the cause of scaling back the utility hike has benefited her employability. She even gets unsolicited offers! Yushchenko, for instance, has mentioned the possibility of appointing her to the NSC job. She had no immediate comment. (Go, go Tymo! You da bomb! But wait a minute, et tu BYuT? No, this can’t be true. Maybe the point is, you will create more opposition value by being inside the game? According to this line of reasoning, the sales pitch of the sensational would-be offer in question appears crystal clear. It invites you to exercise your biological imperative. By playing out your dominatrix fantasies on the scene, you will provide a Condi Rice-like counterweight for the shorthanded Yushchenko to stand up to Yanukovych.)

More seriously, Tymo’s protégé Mykola Tomenko has been shortlisted for the Speaker job. As for this courteous concession, less far-fetched than the previous scenario, it should not be confused with a mere giveaway. If confirmed, Tomenko will take some of the sting out of the lone ranger in her, and, most important, the act will solidify a reciprocity-based precedent to fall back on in case the government changes hands.Attention public sector employees! Oligarchs Inc strikes again. Those of you who licked their lips for a New Deal-type of social contract from the Yanuke Cabinet, you have a dirty mind. This man Azaroff — you better read his lips. Not only does he speak horrible Ukrainian without feeling sorry for the linguistic Chernobyl he creates, but he also has a leg in tax collection. You got it right! Whether you work a nine to five job or run a small business, he’s out to trim a little fat off your pockets. Your ballooning incomes are a menace to Ukraine’s ramshackle industry! As you consume ever more conspicuously, thy poor neighbor, the oligarch, scrimps and saves for innovation. How dare you have a feast amid famine? This goes no further!

Get ready for a low-cholesterol diet next year. Your planned salary raises will be cut in half. Also waiting for you is a 2 percent increase in the payroll tax. There’s yet another trend at work here. FY 2007 Cabinet maintenance and administrative expenses will surge 47 percent. Hallelujah!

And, yes, it’s the economy stupid! A massive PR lobotomy involving an airborne assault of GOP-leaning talent — like the one that claimed you during the spring parliamentary campaign — doesn’t come for free. From now on, expect no more passionate overtures to the welfare state. Regs, who vowed to rid the land of poverty, are now busy reassessing their strategy with a view to bringing your middle-class aspirations to a plateau.

Yanuke the Ripper“Live it to the fullest!” That’s the maxim of the old school of thought now repatriating itself to the upper tiers of government, skilled as it is in the art of Kuchmocracy. Intoxication with power regained by a stroke of dumb luck, or, rather, orange dumbness, sends sparks to Yanukovych’s eyes.The corollary would be “Take whatever you can and run if you have to.” All this adds up to strategy that could go by the name of Yanuke the Ripper, or Regionomics, a strategy of reaping quick benefits before a possible coalition collapse. By no means does this imply outright embezzlement. Those days are gone. Sophistication is the word today. Put your men at the helm of a mammoth monopoly like Naftohaz, Ukrzaliznytsya, or Ukrtelekom — and you have cash flows running wild, straight into your hands, and in pretty legit ways.

Reaganomics v RegionomicsWhen matched against Regionomics in terms of serving private interests, Reaganomics pales by comparison. For all his worship of free market forces, for all the bruises inflicted on the welfare state, for all the unfair tax cuts and untold budget deficits, for all the excesses of deregulation and decentralization, the good ol’ Ronnie would never support Spanish as a second official language. For that matter, neither would the Spanish-speaking Dubya, nor even the soft-on-immigration Governator.In contrast, Regs are conservatives in a sense that Reps aren’t. Regs are compassionate about conserving what communism created. That explains why many of them don’t care enough to learn Ukrainian. They exhibit little compassion for the victims of communism And what makes it even more funny, they are capitalists.

Aside from time and space constraints, it is motivational sets that keep Regionalists and Reaganites words apart. Whereas Reaganites had the Evil Empire to contend with, Regionalists have a closely-held, export-oriented commodity empire to take care of.

Despite the brand of supply-side economics firmly attached to it, Reaganomics arguably produced a host of demand-side effects. It did so through sexier defense budgets in an arms race that drained the economy out of the Evil Empire, whose Ukrainian share of industrial remnants is now possessed by proponents of Regionomics.

Regionomics therefore has more of a supply-side profile, something Regionomics doesn’t have. Cheap labor and natural resources — the key ingredients that go into the competitive advantage of Ukraine’s aged, energy-inefficient, low-tech industry — are more of a curse than a blessing. The heavy guns of post-Soviet industry will hardly keep Ukrainians’ lungs clean, nor will they churn much butter, economically speaking.

So, except maybe for the promise of better living for themselves, the promise-packed campaign Regs orbited with the expertise of GOP talent stands little chance of gaining escape velocity. This about wraps up the stellar conquest of “Better living today” for the rest of us.

Tax-Free Zones Get a Fresh Start, But Not Working SeniorsAfter lying fallow for a few years, tax-free zones are back in business. Finance Minister Azarov, a staunch advocate of these economic preserves, claims that tax-free zones have a history of cultivating oases of innovation in this country. If you find yourself at loss for recalling any quantum leaps in innovation, there’s another side to this story.

Gossipy pundits have long wagged their tongues over these oases being economic black holes for siphoning money out of the government in countless VAT crimes. They have also traced them as points of entry for smuggling billions of dollars worth of uncertified consumer goods and foodstuffs. If by and large what they say is true, then these “Silicon Valleys” incorporate a skunkworks of the shadowy economy that keep money and goods on a neverending joyride in and out of the country. Such core competencies fit them into the category of political fiefdoms. Exactly what cult of innovation do they belong to, Mr. Azarov?

Attention seniors who bring home a few extra hryvnyas worth of bacon! You can’t have too much of a good thing. Stay home and smell the happiness. Just where do you think the expression “death and taxes” came from?

At the risk of belaboring the obvious, you just became unwitting test subjects in somebody’s dirty little scheme. All Is Not Quiet on Mount OlympusBy bouncing a sheaf of executive orders, Chief of Mischief Yanukovych may have amused himself, but he surely enraged Zeushchenko (pardon the portmanteau), who has every reason to be paranoid about losing his grip on power. “Just who the hell you think you are?” roared the prime deity in Ukraine’s pantheon of politics as he cast his thunderbolt.

This happened the day PRU legal eagles falsely instructed their patron that his refusal to countersign executive orders constitutes a veto policy. Once aware of having overstepped his authority, Yanukovych responded with pacifying gestures like “we’re in it together” and “there’s room for everyone.” However, he hasn’t pardoned the five oblast governors on his hit list, Yushchenko’s appointees, whose dismissal he has vigorously demanded.

On Wednesday, October 4, NSNU convenes to pass its final decision on whether or not to join the coalition. Its position: NSNU will settle down only if the coalition goes by the book, that is, by the Universal of National Unity.

Earlier, Speaker Moroz issued a love-it-or-leave statement, warning that unless NSNU joins, it has no place in the government. However, one caveat is in order. The Constitution says that, no matter what happens, the President retains his coalition-exempt share of Cabinet appointees, namely Ministers of Defense, Interior, and Foreign Affairs.

Tired of fighting his little town blues with routine acts of spraying canned pontifications on a weary public, President Yushchenko has set out to refashion this staff. It takes quite a bit of courage to sanitize his tabernacle of the lyubi druzi (beloved buddies), the two words that have become a cliché for the beehive of cronies he’s compiled around himself.

Recent staffing decisions have led some experts to believe that the President plans to “make a brand new start of it,” as Frank Sinatra put it in his “New York, New York.” The timing could not be more perfect. For the first time since the Orange Revolution, his approval ratings have plunged below Premier Yanukovych’s.That’s why Yushchenko keeps delayering the lyubi druzi —in the hope of winning back some of the supporters he has alienated. Among others, the new wave of talent features former Emergency Management chief Viktor Baloha and former Economics Minister Arseniy Yatsenyuk.

Baloha made a name for himself when he stormed out of the then-almighty SDPU and took a load of followers with him. He has replaced Oleh Rybachuk as Chief of Staff. Well-connected in the pre-Revolution government, Yatsenuyk has earned praise for being one of the finest Young Turks in finance and is considered to be an asset to the economic section.

The change of the guard didn’t sop there. Spokeswoman Iryna Herashchenko, Yushchenko’s confidante of five years, stepped down in a move she described as the “passing of the baton. Iryna Vannikova, who has made a sterling career in news, took the baton.

The big question, of course, is whether changes in style will be matched by changes in substance. Unless improvements in public relations go hand in hand with improvements in policymaking, no improvement will be made overall. External decorum cannot substitute for internal dynamics.

Maidan Graffiti Comes to Grief?Vice Premier Andriy Klyuev (PRU) has urged the Central Post Office, to have the relic of the Orange Revolution erased due to what he termed as politically incorrect, obscenity-laced content.

Taken under a protective glass covering since 2005, the graffiti has beautified the entrance columns of Maidan’s chief edifice. No wonder this vivid piece of history, located at the epicenter of the Orange Revolution, has horrified the likes of Mr. Klyuev and his Austria-based brother, foiled as they were by people power in 2004. And those who did this to them are now too traumatized to put up much resistance.That’s why the second anniversary of Maidan may find a blank space in place of the bittersweet mementoes still dear to them.